Spaniards in mega-strike over labour reforms

Two months ago almost to the day Spanish PM Mariano Rajoy was caught telling other EU leaders that his labour reform plan “is going to cost me a general strike.” Well, if he’s been wrong on most things since being elected in a landslide victory over the Socialists in November last year, he’s right on this one.

Industrial action on Thursday March 29 was a massive show of resistance to his moves to slash employment rights, and a more general rejection of austerity policies that even mainstream supporters of neo-liberal ideas think are half mad.

Earlier on Thursday the Comisiones Obreras trade union central, which together with the UGT called the general strike, reckoned on an 85% turnout among Spain’s 10 million or so permanent workforce, once emergency cover agreed by unions is factored into the equation. For the UGT, commenting at midday, the figures were about 77%, with as high as 95% participation in construction and manufacturing. Another measure of success was a 20% fall in electricity consumption to levels typical of a non-working day, a sure sign that the economy had stopped. And it hasn’t only been workers taking part.

Students have been blockading roads and universities since the early hours. The indignados or 15-M movement, meanwhile, has been engaging in a ‘consumer strike’ against the few shops that have remained open, joining pickets and generally adding a carnival atmosphere to the day. An assembly was planned at 9pm in the symbolic centre of the movement, Puerta del Sol.

The central trigger for the strike action is Rajoy’s legislation that makes it easier for firms to lay off workers, cut their wages, or change their working conditions, if they can claim they need to boost their productivity.

Unions argue that this will simply result in more job losses, with estimates, one issued by a think-tank close to the Socialists earlier this week, of an additional 170,000 more unemployed this year alone.

And longer term, the reforms will mean the next generation of Spaniards will be completely deprived of permanent work – a throw-back to the 19th century. Women will be badly hit as too, as advances in rights linked to maternity and caring for dependants are rolled back with flexibility becoming a tool uniquely at the disposal of employers.

Under the right-wing leader of the Popular Party, Spain is heading into a perfect storm that many commentators reckon will result in a ‘lost decade’ of stagnation akin to that experienced by Japan in the 1990s.

Cuts demanded for the next two years by the EU and accepted by Rajoy are deeper than those being pushed through in Greece, Ireland and Portugal, the countries that had to be ‘bailed out’ by the EU-IMF-ECM Troika and which are now under foreign ‘surveillance’ by technocrats.

Portugal and Ireland had to cut their deficits by three (GDP) percentage points over the past two years. Greece, less than five percent. Spain has to cut the deficit by 5.5 points over the next two years. That’s apparently the biggest cuts any rich country has made in recent history . In money terms the figures are huge – a cut in spending up up to €64 billion euros. An ’impossible’ task Luis Garicano of Fedea, a Spanish, think tank has said.

And it will be regional health and education budgets, already under massive pressure, that will bear the brunt of these cuts, with devastating short and longer term effects on the population, especially vulnerable children and the elderly.

Spain is already in a massive mess, economically-speaking. It ended 2011 with a shrinking economy. GDP fell by 0.3% in the final three months of the year, and it is forecast to drop by another 1.7% during 2012.

The country now has one of the weakest employment markets in the eurozone. Unemployment broke through the 5 million mark in January, putting the jobless rate at almost 23%. More than half of all young people are out of work.

Fundamental to the country’s problems now is a collapse in domestic demand caused by spending cuts, unemployment and reductions in wages. At the end of last year, the newly installed Spanish government announced that public sector workers, who took a five per cent pay cut in 2010 and a pay freeze in 2011, would have their wages frozen again in 2012. The labour reforms, by giving employers carte-blanche over their workers, will only accelerate the downward push on wages.

The general strike on Thursday follows a rising tide of protests in Spain against the economically suicidal policies of Mariano Rajoy. Most recently as many as 1.5 million marched on February 29. And on February 25 in the Valencia region alone 300,000 took to the streets.

For the Government there’s no turning back. For the millions who oppose Rajoy, there is. It’s not just about slowing down and writing off some of Spain’s debts and refocusing on policies that provide growth and employment, including quality public services.

It’s also about reversing years of pandering to corporations, especially finance. While its been austerity for the majority, the banks have received €110 billion from the government since 2008. And they are about to get another €50 billion plus bail-out from European citizens via the European Stability Mechanism, if reports in recent days are confirmed.

The fact is, it was the bankers and their gambling on the housing market that caused Spain’s crisis in the first place, when the bubble burst in 2007. It’s time to end the billions for the banks and to listen to the millions on the streets.